Obelkevich v. Safeco Insurance Company of Illinois
3:18-cv-01111
M.D. Penn.Jun 20, 2019Background
- James and Diana Obelkevich insured a home with Safeco; a garage fire occurred on February 12, 2017 and was reported the same day.
- State Fire Marshal could not determine origin/cause; personal property inspections and inventories followed in Feb–Mar 2017.
- BrightClaim produced an inventory of ~627 items valued at $50,867.94; the plaintiffs’ public adjuster later submitted a revised list of ~568 items valued at $221,922.20.
- Safeco’s adjuster (Considine) declined to adopt the plaintiffs’ higher personal property estimate after reviewing photos and materials.
- Plaintiffs sued in state court for breach of contract and bad faith; Safeco removed to federal court and moved for partial summary judgment on the bad-faith claim.
- The court denied Safeco’s motion, finding disputed material facts that could support bad faith under Pennsylvania law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether summary judgment should be granted on plaintiffs’ bad-faith claim under 42 Pa. Cons. Stat. § 8371 | Plaintiffs contend Safeco unreasonably undervalued personal property, imposed burdensome proof requirements, failed to provide a Proof of Loss, and the adjuster lacked knowledge about vendor valuations — supporting bad faith. | Safeco says it investigated, inspected the loss, and attempted to obtain information, so no clear-and-convincing evidence of bad faith exists. | Denied. The court found genuine disputes of material fact about whether Safeco lacked a reasonable basis or recklessly disregarded that lack, precluding summary judgment. |
Key Cases Cited
- Terletsky v. Prudential Property & Casualty Ins. Co., 649 A.2d 680 (Pa. Super. Ct. 1994) (defines insurer "bad faith" standard)
- Hayes v. Harleysville Mut. Ins. Co., 841 A.2d 121 (Pa. Super. Ct. 2003) (establishes clear-and-convincing proof standard for bad faith)
- Anderson v. Liberty Lobby, 477 U.S. 242 (U.S. 1986) (standard for genuine issue of material fact on summary judgment)
- Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. 1986) (summary judgment burdens and party obligations)
- Chamberlain v. Giampapa, 210 F.3d 154 (3d Cir. 2000) (applies Erie and choice-of-law principles in diversity cases)
- Dercoli v. Pennsylvania Nat’l Mut. Ins. Co., 554 A.2d 906 (Pa. 1989) (discusses insurer's duty of utmost fair dealing)